Once a prospect has crossed the checkout line, it’s easy to think the job is done. After all, that’s the hardest part, right? Nope.
Your best customer is the one you already have, and the true secret to success lies in retaining your new customers.
What’s Customer Retention?
Customer retention is the ability of a company to retain its customers over a specified period. If a company has high customer retention, that means its customers continue to rebuy the same products, resubscribe to the same services or, in some other way, continue buying from that company.
Why is it Important?
Customer retention is vital for two reasons: first, you can’t grow your company if you are losing customers at the same time as gaining them. Second, it’s always more expensive to acquire a new customer than it is to keep your current customers and sell more to them – your existing customers already recognize and trust your brand.
Customer retention also significantly increases your ROI. Not only is it five times less expensive than acquiring new customers, but the success rate of selling to an existing customer is 60-70% as opposed to the 5-20% success rate of selling to new customers. Even a small increase in retention can see profits increase from anywhere from 25-95% percent! That’s why a customer retention strategy is an integral part of increasing your ecommerce sales. So, let’s get into it – here are FIVE ways to retain customers, boost sales and protect the bottom line…
#1: Understand Your Competition
Going above and beyond what customers expect is always a good thing. By comparing your business to your competitors, you can better grasp the reality of where and how your target audience shops. When you do this, take note of customer care in all aspects of the shopping journey. From online to offline to social media and more, what stands out as a customer high, customer low and a neutral experience? After assessing your competition, analyze your own efforts, how does your business compare?
A harsh look at what your competition is up to is essential in strengthening your customer care efforts – as well as your inventory assortment, branding, marketing and overall retail experience. If you make completing a competitive analysis a regular business practice and then put effort into improving your store as a result, your customers will appreciate your efforts and will be more likely to shop with you again.
#2 Ask For Feedback & Use It
Customers want to feel that brands value their opinions – it’s one of the key drivers behind loyalty. So, asking for feedback after a sale will show you care about the experience they’ve had with your company and allow customers to feel more invested. And when a customer is personally invested in your brand, they’ll be more likely to return to you.
With that in mind, make sure to ask customers to share whether your products and services have lived up to their expectations. As an ecommerce brand, you should be encouraging customers to leave reviews and then adding those reviews to your product pages. Why? 84% of consumers trust online reviews as much as personal recommendations.
Also, use feedback and reviews on your product to identify areas of improvement in your end-to-end service and to engage with your customers. Listen to what all your customers have to say, and make them feel like their voice is heard and important – because it is.
#3: Offer Thank Yous & Incentives for Return Business
One way to make your customers feel valued is with a simple ‘thank you’ email – which can be automated. It’s a great way to establish a stronger, more personal relationship with your customer.
Incentives are a more tactical way to help encourage consumers to return to your business once they’ve previously made a purchase.
For ecommerce stores, this could be as simple as going the extra mile by rewarding loyal customers with a small gift with an order, an unexpected voucher or a present on a special occasion, such as their birthday, or to celebrate how long they’ve been a customer with your brand. Using incentives for loyal customers helps to show your appreciation for them, whilst elevating their experience and reminding them of your value.
Building a customer loyalty program such as a rewards program or a referral program may also be a good option for some D2C retail-focused businesses. Brands like Starbucks have demonstrated the power of loyalty programs to dramatically promote customer retention. It works because customers love to feel as if they’re getting a deal because they’ve been loyal. Treat them well and they’ll do the same.
#4 Give Customers Valuable Content
Delivering valuable content to your customer and prospect audience keeps your brand top of mind, so running a post-purchase campaign that provides additional value to your customers can be a great tool to enhance the overall shopping experience.
This has proved especially useful for high end brands like Fairfax & Favor, Mr Porter and Lords & Labradors, who regularly send customers educational hints and tips about their new purchase, as well as seasonal recommendations and advice.
This helps demonstrate that you care about the customer and your product beyond making the sale, and proves your brands’ commitment to their experience, as well as your credibility as an industry leader – which will all help encourage them to keep coming back for more.
#5 Streamline Ops to Deliver Outstanding Experiences Post Purchase
Excellent customer service at every communication point is critical to establishing customer loyalty. A single poor customer service experience can sour even a long-term customer relationship and overshadow all previous great experiences.
According to Brightpearl’s own research, 77% of all 1-star reviews on Trustpilot are related to issues after the buy button, like delayed deliveries, or items being shipped to the wrong place. These mistakes will not win you any favor with customers – it quickly erodes trust in your brandand you can probably count out any repeat business.
If you’re running out of stock or shipping to the wrong addresses on a regular basis, these mishaps are often down to ineffective workflows or human error in the operations side of the house. This is a very common issue as brands scale and start adding more channels, and diversifying into new markets.
Technologies that are commonly undervalued – but so important to retention – are those that sync sales channels and orders with inventory and shipping so consumers get the right product on time every time, and help streamline and automate key workflows, from orders through to fulfillment so you can exceed customer expectations.
A vital element of your strategy should be making sure the ‘back end’ technologies in your business are up to scratch to help manage more complex operations and drive better end-to-end experiences. And, that’s what matters when you think about the longevity of a brand. Outstanding end-to-end experiences drive more loyalty which ultimately can be the difference between customer retention and customer churn.